Lomé, Togo, June 6, 2017—World Bank Group Vice President of Development Finance, Axel van Trotsenburg, met with government officials in Lome today to discuss opportunities for the country to access significantly higher levels of financing from the International Development Association (IDA).
In December 2016, a coalition of more than 60 donor and borrower government agreed to dramatically scale up the fight against extreme poverty with a record $75 billion commitment to IDA, the World Bank’s fund for the poorest countries. This illustrates the global community’s solidarity and commitment to transform the lives of billions of people.
An estimated 60 percent of the total package—$45 billion—will finance investments in Sub-Saharan African countries over the next three years. The funding will enable IDA to dramatically scale up development interventions in countries eligible for IDA financing, including Togo, to help tackle conflict, fragility and violence, forced displacement, climate change, and gender inequality, and help promote governance and institution building and create jobs.
IDA’s national envelope for Togo will double during the IDA18 period, with up to $230 million available from July 1, 2017-June 30, 2020. Combined with the $113 million in IDA financing approved in the second quarter of 2017 and resources from the regional IDA envelope, the total IDA grant and credit financing is estimated at over $340 million during the period covered by the newly adopted World Bank Group Country Partnership Framework for Togo (CPF).
“The IDA financing and policy package seeks to stimulate inclusive growth and create new opportunities,” van Trotsenburg said. “We are looking forward to working with the government and the private sector to undertake transformational investments that can help boost Togo’s economy, create opportunities for people, and make the country more resilient to shocks and crises.”
Togo is also eligible for resources from IDA’s regional window, which finances transformative projects that cross borders, and a new Private Sector Window (PSW) to spur private sector investments in the poorest and most fragile markets. The PSW will support investments that are typically considered too risky, but have a potentially strong development impact.
“Many countries face challenges attracting successful, pioneering and responsible investments—which in turn impacts domestic and foreign investors’ perceptions of risk.” van Trotsenburg said. “By blending public and private resources to de-risk investments, the PSW will broaden the private sector’s ability to create markets and demonstrate that, with the right risk/return profile, frontier markets are investible and profitable and in turn encourages further investment.”
The PSW builds on the World Bank Group’s robust support to the private sector. Over the past decade, IDA, the International Finance Corporation and the Multilateral Guarantee Agency have together supported over $100 billion in private sector investment in IDA countries. Interventions range from supporting the enabling policy and regulatory environment to financing necessary complementary investments, including physical infrastructure, and investing directly in the private sector. All three institutions will work together to make strategic use of public resources to catalyze private investments in these challenging markets.
In Togo, IDA is currently supporting projects to improve agricultural productivity, provide social safety nets, ensure women and children have access to health and nutrition services, and create jobs for young people. Togo’s CFP outlines new operations, to be financed by IDA, in the areas of energy, competitiveness and skills development, urban infrastructure, logistics services, health, public services, coastal management and integrated disaster and land management. A number of analytical studies and advisory services are also planned, including among others on public-private partnerships, taxes, debt management, land policy, sources of growth and competitiveness, gender, decentralized service delivery, and a blue economy strategic framework.
“IDA resources are making a significant impact on the quality of life and opportunities for people in Togo,” said Pierre Laporte, World Bank Country Director for Togo. “These resources support efforts to build stronger public institutions, create jobs and a vibrant private sector, strengthen delivery of public services such as health care and social safety nets, and build resilience—all areas that will help Togo reduce poverty and promote sustainable growth.”
* The World Bank’s International Development Association (IDA), established in 1960, helps the world’s poorest countries by providing grants and low to zero-interest loans for projects and programs that boost economic growth, reduce poverty, and improve poor people’s lives. IDA is one of the largest sources of assistance for the world’s 77 poorest countries, 39 of which are in Africa. Resources from IDA bring positive change to the 1.3 billion people who live in IDA countries. Since 1960, IDA has supported development work in 112 countries. Annual commitments have averaged about US$19 billion over the last three years, with about 50 percent going to Africa.